MHA MacIntyre Hudson has published a free report paper aiming to address car dealers’ immediate need for proactive business continuity planning as the impact of COVID-19 coronavirus begins to be felt.
The accountancy, audit, tax and business advisory specialist has focused on the key short-term action planning areas for dealers to focus upon and the support on offer to retailers at a time when many are starting to feel the effects of an expected market downturn in the new “COVID-19: Short-term action planning for dealers” paper.
In a statement accompanying the publication, MHA said: “This expected market downturn at this crucial time of the year for dealers could quickly create a liquidity and funding crisis.
“There are a number of crucial pinch points for motor dealers where very large tax and other payments are required to be made in the next couple of months and being proactive ahead of any downturn is crucial.
“The potential financial support is there for UK businesses as the note explains. It is very important to identify whether this might be required and to make plans to realise this.”
Among MHA’s advice comes a suggestion to explore the possibility of tax payment deferals and immediate discussions with bankers and other funders with a view to establishing whether dealers can obtain: a temporary increase in funding facilities; a deferral of mortgage payments or rents in-line with the arrangements which the sector took advantage of during the 2008/9 recession; an interest rate holiday.
Its statement added: “The MHA Motor Advisory team have been responding to these events by considering the key areas which are likely to impact dealers and ways in which we can offer guidance and support to help them navigate through these very challenging times over the next few weeks and months.”
MHA’s practical advise comes a day after Chancellor Rishi Sunak outlined a package of fiscal support for UK business which will be impacted by the coronavirus outbreak.
The Government’s package - announced just a week after the 2020 Budget - includes £330 billion in loans, £20bn in other aid, a business rates holiday, and grants for retailers and pubs. Help for airlines is also being considered.
Sunak said it was an "economic emergency. Never in peacetime have we faced an economic fight like this one."
The Government’s measures are largely targeted to support smaller businesses, however.
Ahead of the Chancellor’s announcement yesterday, National Franchised Dealers Association (NFDA) director, Sue Robinson, urged Government to extend the actions to include businesses with a larger turnover and greater employee base.
The NFDA recommended that:
- Temporary business rates relief be extended to all retail businesses, regardless of their rate bill.
- The British Business Bank be authorised to extend the Coronavirus Business Interruption Loan Scheme to any retail business, regardless of size.
- Statutory Sick Pay (due to Coronavirus) relief should be provided for the first two weeks to all retail businesses, regardless of size.
Robinson said: “The impact of the virus is going to be felt across every part of the economy and especially in the retail sector.
“Revenues from vehicle sales and services will not only be impacted by the introduction of social distancing measures, but also by the widespread shutdown of European car and parts manufacturing.
“There is a real danger that if the Government is only targeting support at one group of businesses (SMEs), some big businesses will fail, causing business interruption in any case for SMEs that contract with them.
“The automotive retail sector needs to be protected regardless of size.”